As the Trump administration considers shelling out billions to shutter offshore wind projects, energy executives are facing the uncomfortable reality that renewable energy may no longer be a viable business in the U.S.
Earlier this week, Trump’s Department of the Interior said it would pay offshore wind ventures Bluepoint Wind and Golden State Wind a total of $885 million—in what essentially amounts to a refund—to walk away from their respective offshore wind leases. The announcement comes after the administration last month struck a similar $1 billion deal under the same terms with French energy company TotalEnergies, bringing total reimbursements the administration has promised to offshore wind ventures to nearly $2 billion. All three ventures pledged to redirect the money they would have invested in wind into fossil fuel projects like liquefied natural gas (LNG), oil, and gas, and agreed not to pursue any more offshore wind ventures in the U.S., according to the Department of the Interior.
Shuttering these wind projects, which were planned to provide energy to states such as New York, New Jersey, California, and North Carolina, could set renewable energy back years and cost companies years of work for efforts already well underway, say experts. Some leases were still in earlier stages while other offshore wind projects that the administration tried to halt have begun construction.
Yet some energy executives have said they are just reacting to the new reality of the energy market under Trump, where oil and gas take priority and renewable energy is actively delayed.
“We did not take this decision lightly. But when the underlying conditions in a market change, we must adapt,” Michael Brown, CEO of Ocean Winds North America, one of the companies participating in both the Bluepoint Wind and Golden State Wind ventures, said in a statement to Fortune.
Speaking about the deal to reporters last month, TotalEnergies CEO Patrick Pouyanné went further, saying that rather than engage in a lengthy and costly lawsuit with the Trump administration, the company preferred to strike a deal.
“It’s a matter of a win-win situation,” said Pouyanné. “So for us, again, we recoup our money, but we will reinvest it in energy, in gas, which is by the way, part of our strategy as well.”
While companies’ willingness to make deals with the administration makes business sense, the deals will in some cases be unwinding years of work that would have added more wind energy to the U.S., whose power grid still largely relies on fossil fuels. The renewable energy industry in the U.S. overall is likely to suffer further because of the Trump administration’s actions, said Joel Eisen, an energy law professor at the University of Richmond.
“It’s not as if the companies are being paid to walk away from something they haven’t started. There was significant activity that had to go into getting the lease itself,” said Eisen.
Years of work
Companies giving up their leases doesn’t prevent another company from coming along and trying again, but any new company would have to start the regulatory process over again. Offshore wind projects in particular are subject to among the “most intense regulatory scrutiny of any energy project,” said Eisen. Some regulations they must abide by include environmental laws protecting animal and plant species potentially affected by the project as well as both state and federal energy laws—not to mention dealing with years of work to even get a lease. Eisen said one wind venture backed by Norwegian energy company Equinor, Empire Wind, took eight years between when they obtained their lease in 2017 to when they began to lay the foundation for their wind turbines in 2025.
Given Trump’s antipathy toward renewable energy, and wind turbines in particular, many companies might decide pursuing offshore wind development isn’t economically viable.
“It would be difficult to get the federal approvals that are necessary when you have an administration that is saying, ‘We’re willing to pay people to walk away from the process,’” said Eisen.
The Trump administration’s efforts to unwind offshore wind deals marks a major reversal from policies under the Biden administration. By December 2024, a month before President Trump was inaugurated for a second term, the Biden administration had approved 11 commercial-scale offshore wind energy projects that aimed to provide more than 19 gigawatts of power, or enough to power 6 million homes, with a goal of deploying 30 gigawatts of power via offshore wind by 2030.
President Trump, for his part, has repeatedly attacked renewable energy, and especially wind. At a White House event with oil industry executives in January, the President said, “My goal is to not let any windmill be built. They’re losers.” As such, his administration has moved to curtail existing renewable energy projects even before his most recent deals with offshore wind ventures—with potentially big consequences.
Pausing leases
In December, Trump’s Department of the Interior paused all leases for offshore wind projects in U.S. waters citing national security risks that temporarily stopped work on Equinor’s Empire Wind. A month after the pause, in January, a U.S. District Court judge allowed construction to continue on the Empire Wind project via a preliminary injunction. Yet if the judge rules in favor of the administration, thousands of people employed by the Empire Wind project could be laid off, and the $4 billion Equinor has invested in just the first phase of the project could be wasted, according to the Syracuse Law Review.
Meanwhile, the U.S. is facing strained global oil and natural gas supplies thanks to the Iran war. Before the war, around 20 million barrels of oil passed through the Strait of Hormuz daily, according to the International Energy Agency, or about a fifth of the world’s global energy supply.
The U.S has a large strategic reserve of oil, but its supply has been depleted by Iran war disruptions and stood at less than 60% as of February.
The country is still heavily dependent on fossil fuels for energy. As of 2023, about 60% of electricity generation in the U.S. was produced by fossil fuels, with the majority coming from natural gas and coal, according to the Energy Information Administration. Wind, meanwhile, accounted for about 10% of nationwide energy generation.
Not using all the offshore wind possible would be a missed opportunity, said Laura Deehan, state director with nonprofit Environment California, in a statement to Fortune.
“This clean alternative perfectly complements our existing solar and storage investments by harnessing the strongest winds off our coast—especially during peak evening demand.”
The amount of energy derived from wind pales in comparison to numbers from the European Union and China, said Eisen. In China, wind energy makes up about 16% of its generation capacity, according to the Energy Information Administration. In the European Union, wind generates about 17% of its total electricity.
“Offshore wind has the potential to contribute enormously to the country’s increasing demand for electricity,” said Eisen. “At the same time, when we’re having a conversation nationwide about supply and about affordability, it’s really galling to walk away from an energy source that consumes no fuel and could supply a significant amount of the nation’s electricity.”
This story was originally featured on Fortune.com
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